Cell C has signed a recapitalisation deal with Blue Label Telecoms with the aim of reducing the company’s net debt to approximately R8 billion. The deal will also enable Cell C to continue to deliver on its growth strategy in a sustainable manner.
Blue Label Telecoms will contribute R5.5 billion in a subscription for 45% of Cell C’s total issued share capital, which is an increase in their prospective holding from the 35% announced previously.
The Management and staff of Cell C will subscribe for 25% of the issued capital and 3C Telecommunications will subscribe for the sufficient new equity to hold the remaining 30% of the total issued share capital.
“We are delighted to announce this partnership with Blue Label Telecoms and Cell C management and staff. This transaction allows Oger Telecom and 3C to remain invested in Cell C and participate in the value creation arising from this enhanced strategic relationship. We look forward to seeing Cell C achieving new heights,” said Mr Mohammed Hariri, Chairman of Cell C and Oger Telecom.
“The recapitalisation provides a sustainable growth platform to build on our successes as we continue to drive customer value to realise our exciting growth potential. This is a transformational transaction for Cell C and we are extremely excited about the strengthening of our relationship with Blue Label Telecoms,” said Jose Dos Santos, Cell C Chief Executive Officer.
The proposed recapitalisation is subject to funding of all parties and necessary regulatory approvals.
The recapitalisation is expected to be implemented by 18 November 2016.